September 24, 2008

As I've been saying for a long time (see "The Diversity Recession") the easy way to get rich quick is to debauch credit standards, take the money and run, then let somebody else pay to clean up the mess. It's an inevitable temptation. That's why the government, which usually winds up on the hook for bailing out the crash to keep it from turning into a depression (e.g., with federal deposit insurance), is supposed to regulate lending, to take the punchbowl away just when the party gets interesting.

Unfortunately, the sacred word "diversity" provided an excuse for everybody who is anybody -- developers, lenders, politicians, activists -- to keep all four trotters in the trough. Its by no means the only excuse that was offered for the degradation of traditional lending standards, but whatever its absolute share of the blame, it's relative share of the blame in public discourse has been disproportionately small so far.

Here's George W. Bush's speech from six years ago to the White House Conference on Increasing Minority Homeownership. The precise programs he was advocating aren't terribly important, they're fairly minor, but the tone of his speech is important. It puts the Presidential Seal of Approval on the orgy of dubious mortgage lending (Down payments? We don't need no steenking down payments!) in the name of increasing minority homeownership.

This is the bipartisan consensus epitomized.

By the way, this isn't some eloquent oration Michael Gerson wrote and Bush just read it stolidly off the teleprompter. As you can see from the garbled syntax, this is Bush winging it, straight from his heart. He really believes all this stuff.

THE PRESIDENT: …. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That's what we want. This is -- an ownership society is a compassionate society.

More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a -- it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future.

We've got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause.) … And it's going to require a strong commitment from those of you involved in the housing industry. …

I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.)

We've got the Horton family from Little Rock, Arkansas, here today. … They were helped by HUD, they were helped by Freddie Mac. …

Finally, Kim Berry from New York is here. She's a single mom. You're not going to believe this, but her son is 18 years old. (Laughter.) She barely looked like she was 18 to me. And being a single mom is the hardest job in America. And the idea of this fine American working hard to provide for her child, at the same time working hard to realize her dream, which is owning a home on Long Island, is really a special tribute to the character of this particular person and to the character of a lot of Americans. So we're honored to have you here, Kim, and thanks for being such a good mom and a fine American. (Applause.)

I told Mel Martinez I was serious about this initiative… And the good news is, Mel Martinez believes it and means it, as well. He's doing a fine job of running HUD, and I'm glad he has joined my Cabinet. (Applause.)

I see Rosario Marin, who's the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is. …

All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I'm concerned. It's part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it's safe or not. It brings pride to people, it's a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It's a part of -- it's of being a -- it's a part of -- an important part of America.

Homeownership is also an important part of our economic vitality. If -- when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; …

Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it's good for the pocketbook of the country, as well.

To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate.

And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there's a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.

Secondly, affordable housing is a problem in many neighborhoods, particularly inner-city neighborhoods. … I'm doing is proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce. (Applause.)

Over the next five years the initiative will provide home builders and therefore home buyers with -- home builders with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. …

And we've got to set priorities. And one of the key priorities is going to be inner-city America. …

Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.)

Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there's a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I'm not sure I can possibly understand that. Why do I want to buy a home? There's an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream.

Homeownership education is critical. And so today, I'm pleased to announce that through Mel's office, we're going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.)

And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that's what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it's important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they're into their new home. It is a -- it is a way to help us meet this dream of 5.5 million additional families owning their home.

I'm also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. …

Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I'm talking about, I'm talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.

Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set.

Freddie Mae -- Fannie Mae and Freddie Mac -- I see the heads who are here; I want to thank you all for coming -- (laughter) -- have committed to provide more money for lenders. They've committed to help meet the shortage of capital available for minority home buyers.

Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin [Raines], I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It's the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done.

Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. …

There's all kinds of ways that we can work together to meet the goal. Corporate America has a responsibility to work to make America a compassionate place. Corporate America has responded. As an example -- only one of many examples -- the good folks at Sears and Roebuck have responded by making a five-year, $100 million commitment to making homeownership and home maintenance possible for millions of Americans. …

The non-profit groups are bringing homeownership to some of our most troubled communities. …

The other thing Kirbyjon told me, which I really appreciate, is you don't have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives.

And so is Luis Cortes, who represents Nueva Esperanza in Philadelphia. I went to see Luis in the inner-city Philadelphia. … But he also understood that a homeownership program is incredibly important to revitalize this neighborhood that a lot of folks had already quit on. …

Again, I want to tell you, this is an initiative -- as Mel will tell you, it's an initiative that we take very seriously. … Thank you for coming. May God bless your vision. May God bless America. (Applause.)

What would 5.5 million marginal mortgages cost? I dunno ... at, say, $127,000 each, that would be, what, $700 billion?

This might be another case where we would have been better off with a straightforward affirmative action program for Non-Asian Minorities (NAMs) rather than lower standards for everybody. At least, with quotas, you get the best from each race, whereas when you lower standards enough for NAMs to get higher representation, you wind up with lower quality from within each group.

For example, when NAMs complained to the Nixon Administration that the they weren't passing the federal civil service exam at the same rate as whites, the government spent a fortune creating the perfect new civil service exam, the PACE, with five subsections, validated for over 100 different jobs. Of course, a higher quality test didn't solve the problem of lower NAM competence, so the Carter Administration junked the PACE and left it up to each department to cobble together its own hiring process, with deleterious long-term results.

24 comments:

Anonymous
said...

The following is an even worse, almost Onion-like, justification for irresponsible lending. Basically, it urges us to defeat the terrorists by borrowing more, because the terrorists hate home-ownership:

REMARKS BY THE PRESIDENT ON HOMEOWNERSHIPat the Department of Housing and Urban DevelopmentWashington, D.C.June 18, 2002, 10:30 A.M. EDT

THE PRESIDENT: Well, thank you all very much for that kind welcome. I'm here for a couple of reasons. First, I want to thank you all for your service to the greatest nation on the face of the Earth. (Applause.) I'm here to celebrate National Homeownership Month, because I believe owning a home is an essential part of economic security. And I'm concerned about the security of America. (Applause.)

HUD is an "important agency,". I had the pleasure on June the 12th of speaking to the last President who visited HUD. I wish number 41 a happy birthday. (Applause.) And I'm glad you've invited me here today, I really am. I first am really proud of Mel Martinez and Alphonso Jackson. I've known Mel for a while, I've known Alphonso for a long time. There was no question in my mind that these two fine Americans would do a great job in leading this important agency. (Applause.)

I want to thank all those who have assumed leadership roles, who have left your states and your friends to come and serve America. And that's important. Service to our country is an incredibly important part of being an American.

I want to thank all those who have worked here for a short time and long time, who will be here after we leave. I want to thank a man named Larry Thompson, who has worked here for -- where's Larry? (Applause.) Larry's been here for 30 years. And I want to -- appreciate your service, Larry, and thank you for setting such a fine example for many others inside this building who serve the country.

Let me first talk about how to make sure America is secure from a group of killers, people who hate -- you know what they hate? They hate the idea that somebody can go buy a home. They hate freedom; that's what they hate. They hate the fact that we worship freely. They don't like the thought of Christian, Jew and Muslim living side by side in peace. They don't like that at all. And therefore, they -- since they resent our freedoms, they feel like they should take out their resentment by destroying innocent lives. And this country will do everything we can possibly do to protect America. (Applause.)

And that's going to mean making sure our homeland is secure, and I appreciate the progress we're making on setting up a Department of Homeland Security. I know it's going to be hard for some in Congress to give up a little power here and there, but I think it's going to happen because people realize we're here to serve the American people, not here to serve a political party or turf in the United States Congress. (Applause.)

But the best way to secure the homeland is to hunt them down one by one. And I mean hunt them down one by one and bring them to justice, which is precisely what America will do. (Applause.)

I want to thank the choir for coming, the youngsters for being here. I just want you to know that, when we talk about war, we're really talking about peace. We want there to be peace. We want people to live in peace all around the world. I mean, our vision for peace extends beyond America. We believe in peace in South Asia. We believe in peace in the Middle East. We're going to be steadfast toward a vision that rejects terror and killing, and honors peace and hope.

I also want the young to know that this country, we don't conquer people, we liberate people -- because we hold true to our values of life and liberty and the pursuit of happiness. The security of our homeland, the need to make sure that America is safe and secure while we chase peace is my number one priority for the country.

But I've got another priority, as well. I not only want America to be safer and stronger, I want America to be better. (Applause.) I want America to be a better place. I worry about our economy, because there are people who can't find work who want to work. In this town, people look at numbers all the time -- you know, such and such a number dropped, or this number increased. What I worry about are hearts and souls. That's what I worry about. And if somebody is trying to find work who can't find work, we need to continue to expand our job base. (Applause.)

We also have got to understand, in this land of plenty, there are pockets of hopelessness and despair. You know, I mentioned the word American Dream in Atlanta. I also recognize that some people aren't sure that dream extends to them. Some people don't even know what the dream means. And our job -- our jobs, our collective jobs, is to make sure that notion of the American Dream extends into every single neighborhood around this country. (Applause.)

I know this isn't the right department when I talk about education, but education, making sure every child is educated and no child is left behind, is part of making sure the American Dream extends to every single neighborhood in America. (Applause.) And we're making progress in a practical way when it comes to educating children, because, you know what, for the first time the federal government says, if you receive money, you need to let us know whether the children are learning to read and write and add and subtract. And if they are, we'll praise the teachers and praise the parents and praise the administrators. But if not, if our children can't read and write and add and subtract, instead of just hoping something changes, we're going to use the accountability system to insist upon change, so every child has a chance to realize the dream in America. (Applause.)

But I believe owning something is a part of the American Dream, as well. I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home. (Applause.) And we saw that yesterday in Atlanta, when we went to the new homes of the new homeowners. And I saw with pride firsthand, the man say, welcome to my home. He didn't say, welcome to government's home; he didn't say, welcome to my neighbor's home; he said, welcome to my home. I own the home, and you're welcome to come in the home, and I appreciate it. (Applause.) He was a proud man. He was proud that he owns the property. And I was proud for him. And I want that pride to extend all throughout our country.

One of the things that we've got to do is to address problems straight on and deal with them in a way that helps us meet goals. And so I want to talk about a couple of goals and -- one goal and a problem.

The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. That ownership gap signals that something might be wrong in the land of plenty. And we need to do something about it.

We are here in Washington, D.C. to address problems. So I've set this goal for the country. We want 5.5 million more homeowners by 2010 -- million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it's going to mean we're going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.

And so I want to, one, encourage you to do everything you can to work in a realistic, smart way to get this done. I repeat, we're here for a reason. And part of the reason is to make this dream extend everywhere.

I'm going to do my part by setting the goal, by reminding people of the goal, by heralding the goal, and by calling people into action, both the federal level, state level, local level, and in the private sector. (Applause.)

And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)

We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year -- 40,000 families a year -- will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)

The second barrier to ownership is the lack of affordable housing. There are neighborhoods in America where you just can't find a house that's affordable to purchase, and we need to deal with that problem. The best way to do so, I think, is to set up a single family affordable housing tax credit to the tune of $2.4 billion over the next five years to encourage affordable single family housing in inner-city America. (Applause.)

The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I'm not so sure I want to sign this. There's too many words. (Laughter.) There's too many pitfalls. So one of the things that the Secretary is going to do is he's going to simplify the closing documents and all the documents that have to deal with homeownership.

It is essential that we make it easier for people to buy a home, not harder. And in order to do so, we've got to educate folks. Some of us take homeownership for granted, but there are people -- obviously, the home purchase is a significant, significant decision by our fellow Americans. We've got people who have newly arrived to our country, don't know the customs. We've got people in certain neighborhoods that just aren't really sure what it means to buy a home. And it seems like to us that it makes sense to have a outreach program, an education program that explains the whys and wherefores of buying a house, to make it easier for people to not only understand the legal implications and ramifications, but to make it easier to understand how to get a good loan.

There's some people out there that can fall prey to unscrupulous lenders, and we have an obligation to educate and to use our resource base to help people understand how to purchase a home and what -- where the good opportunities might exist for home purchasing.

Finally, we want to make sure the Section 8 homeownership program is fully implemented. This is a program that provides vouchers for first-time home buyers which they can use for down payments and/or mortgage payments. (Applause.)

So this is an ambitious start here at the federal level. And, again, I repeat, you all need to help us every way you can. But the private sector needs to help, too. They need to help, too. Of course, it's in their interest. If you're a realtor, it's in your interest that somebody be interested in buying a home. If you're a homebuilder, it's in your interest that somebody be interested in buying a home.

And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.

There's a lot of faith-based programs that want to be involved with educating people about how to buy a home. And we're going to have an active outreach from HUD. (Applause.)

And so this ambitious goal is going to be met. I believe it will be, just so long as we keep focused, and remember that security at home is -- economic security at home is just an important part of -- as homeland security. And owning a home is part of that economic security. It's also a part of making sure that this country fulfills its great hope and vision.

See, I tell people -- and I believe this -- that out of the evil done to America will come some incredible good. (Applause.) You know, they thought they were attacking a country so weak and so feeble that we might file a lawsuit or two, and that's all we'd do. (Laughter.) That's what they thought. We're showing them the different face of America. We're showing them that we're plenty tough. When it comes to taking somebody trying to take away our freedoms, we're tough, and we're going to remain tough and steadfast. (Applause.)

But I also want people to see the deep compassion of America, as well. I want the world to see the other side of our character, which is the soft side, the decent side, the loving side. I want people to know that when we talk about dreams, we mean big dreams. And when we talk about a free society, we want a society in which every citizen has the chance to advance, not just a few.

And part of the cornerstone of America is the ability for somebody, regardless of where they're from, regardless of where they were born, to say, this is my home; I own this home, it is my piece of property, it is my part of the American experience. It is essential that we stay focused on the goal, and work hard to achieve that goal. And when it's all said and done, we can look back and say, because of my work, because of our collective work, America is a better place. Out of evil came incredible good.

Terrific: long (and I'm sure) informative speech by that most insightful politician, George W Bush. I'll get right on it. Can't think of any better use of my time. If I never get around to it in this life it shouldn't matter too much: I'm sure all of Bush's, McCain's and Obama's greatest hits will be playing on my iPod in Hell. If not they'll be there to recite them for me.

One of the problems Republicans have had in recent years is the movement of the well-educated and wealthy towards the Democratic Party. This has been especially true in the financial sector, partly because it's located in New York, partly because it's somewhat dominated by Jews, who tend to be pretty liberal anyway. The truly wealthy are leaving the GOP, for several reasons. One, because on economic issues the GOP is a cheap date - capital gets its tax cuts and handouts from the GOP whether or not they support the GOP in turn. Two, because they don't like the class of crowd that's started to fill up the place - the working classes and the religious right. Today the GOP is kinda like bowling: it used to be the sport of aristocrats, now it's the sport of proles.

And even to the extent that the wealthy are Republican, they pretty much don't buy into the social issues (meaning both the religious and the secular stuff, like affirmative action and immigration) anyway.

That's a big reason why GOP pols have pretty much given up fighting the race agitators. Flak from the media and no support (sometimes even opposition, as on immigration) from their cocktail party guests.

For the most part, the elite never thought the race agitators much of a problem. Sure, they had to put up with a lousy manager here, a few less-productive employees there, a few payoffs to La Raza or the Rainbow Coalition over there, and a discrimination lawsuit or two, usually settled out of court. All part of the cost of doing business, and something your competitors had to put up with, too.

But now the mortgage crisis comes along, with the chance of shutting down the party for a good long time. And what's the root cause? A lot of the evidence seems to point in the direction of the race agitators, who agitated for lower lending standards via CRA and other government programs.

Just about now, if anyone’s paying attention, and if that 8 martini lunch has worn off, it should be dawning on certain people in the financial district that there is more than just a marginal cost to going along with the race agitators. That the threat they face to the free market system, through control of capital, government mandated loans to high-risk borrowers, and redistribution of wealth from productive to non-productive groups, is not just a cost of doing business, but a threat to their very survival. Taking on the race agitators is a battle which has to be fought, and there’s only one party with the voter base willing to do it – a party whose voters have been wanting to fight that battle for a very long time, in fact. And we know which party that is.

So how should conservative groups respond? First, to the extent that CRA and mandated lower lending standards were responsible for this crisis, it needs to be shouted far and wide - no time for racial sensitivity. Second, business needs to know that Republicans expect their support when taking on immigration, affirmative action, and all the rest in return for lower taxes and regulation. Indeed, less immigration is the only way we can maintain lower taxes and respect for private property over the long haul. Mass immigration, especially of the “undocumented” kind, is cheap growth - a house of cards. Third, passage of any bailout program needs to be contingent on revocation of any program which drove down lending standards, including CRA. Lending is competitive enough a market than any worthy credit risk can get a loan somewhere. Fourth - sort of a tangent - keep the government out of the housing market. We’re already hearing about how America needs immigrants to prop up our social security system, so we sure as hell shouldn’t want to start hearing about how we need them to prop up the value of our $700 billion real estate investment. In fact, I wouldn’t mind if the Chinese and Saudis bought up all the excess housing – then it would feel really good when we slashed immigration levels to the bone and their investments failed to pay off.

But last, to repeat myself, we need to keep reminding business: there is a price to be paid for tolerating and supporting the race agitators. For far too long that price has been paid by average working Americans – a job lost to AA, an immigrant overrun neighborhood, higher taxes to fund welfare programs left-wing groups (like ACORN), and lower productivity growth thanks to EEOC lawsuits. It’s time we reminded capital that if they refuse to stand up, they will be bearing that cost, too.

Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. …

There have been several discussions on this site and elsewhere about Bush's general level of intelligence. Whatever that may be, I just can't get away from the fact that every time the man makes a public pronouncement, even with the opportunity ahead of time to organize and prepare his thoughts, he sounds like . . . well, not like an idiot, exactly, but like a man of absolutely unexceptional intelligence. All politicians speak in platitudes, but one senses that Bush's mind really doesn't go any deeper.

When Chris Dodd was contending for the Deomcratic nomination, I'd see him on TV making his stump speeches, and he sounded pretty much like any other politician, and I'm not particularly a fan of his. But I then saw him on the Charlie Rose show. He understood that the audience he was now addressing could handle greater complexity while remaining interested, and he adjusted the pace and depth of his responses accordingly. It was like his verbal IQ had jumped by about 20 points as compared to the things I'd heard him say before.

I seriously wonder if Bush could do that. Is there really any "there" there?

Re: Both of the Bush speeches - it's truly, phenomenally amazing the things Bush justified as necessary to fight terrorism (home loans to minorities, maxing out your credit cards, invading a ountry (Iraq) which has never sponsored a single terrorist act against America) and the things he said were unnecessary (keeping US ports out of Arab ownership, increasing military size/pay, and, oh yeah, not securing the borders.

Stupidity and incompetence on this grand a scale is just impossible to comprehend. Can we be faulted for not thinking it's corruption, or maybe just sheer malice?

I first am really proud of Mel Martinez and Alphonso Jackson. I've known Mel for a while, I've known Alphonso for a long time. There was no question in my mind that these two fine Americans would do a great job in leading this important agency.

Wait! Mel Martinez was in charge of HUD when this big push was going on? Open borders Mel Martinez? This mortgage meltdown is just the gift that keeps on giving!

I want to thank the choir for coming

Too good a line. A choir at a HUD speech. Bush is preeching to the choir?

I just can't get away from the fact that every time the man makes a public pronouncement, even with the opportunity ahead of time to organize and prepare his thoughts, he sounds like . . . well, not like an idiot, exactly, but like a man of absolutely unexceptional intelligence. All politicians speak in platitudes, but one senses that Bush's mind really doesn't go any deeper.

Well said. And while normal people can be forgiven for freezing up in front of a camera, Bush has had 14+ years to work on this.

I see Rosario Marin, who's the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is.

This reminded me of a job I had back in high school, doing telephone marketing surveys for a major Republican pollster. In the summer of 1992, the first president Bush, desperately fighting for re-election, wanted to know if the fact that he had a Hispanic surgeon general (Antonio Novello) had any affect on his Latino support. So we called lots and lots of Latinos. Most...no, NONE of them had ever heard of her. None of them cared. (But then, why should they?) I never really remembered that experience until today. I hated that job. Thanks for reminding me.

Some statistics on non-white delinquency and defaults across all mortgage grades and loan types would be interesting to see.

Don't know if this will help you, but below I copied and cleaned up a recent (9/22) comment by an Anonymous.

Below each hyperlink is a juicy excerpt or preview therefrom.

Enjoy.

***

Someone said, "My criticism of your VDare piece is it implies that minorities are more likely to default on their loans. This is probably true. Please show the statistics to back it up. My second criticism is that the dollar value of losses may not be disproportionally [sic] minority caused."

See cites below. They show:

a) Default rate is higher among minorities; and

b) Minorities are more likely to have subprime loans even at higher income levels. (Reason: income is not a perfect proxy for IQ, and high-income minorities are very disproportionately affirmative action recipients. See the regression to the mean in Prince George's County.)

"What insurers aren't allowed to do is discriminate based on race, no matter how actuarially sound their arguments. Blacks, for example, have shorter life expectancies on average than whites, but companies aren't allowed to charge black customers more for life insurance."

"A similar pattern can be seen in Chicago, where foreclosure filings tripled, to 7,576, from 1993 to 2005. Neighborhoods where the population is more than 80 percent non-white account for 65 percent of all cases, up from 61 percent in 1993, according to data compiled by the National Training and Information Center, a housing advocacy and research group based in Chicago. The same trends have been documented in Atlanta and Philadelphia, according to researchers from Harvard and the Reinvestment Fund, a Philadelphia-based investment organization hired by the Pennsylvania Department of Banking to study mortgage foreclosures in the state."

"The 10 neighborhoods with the highest rates of mortgages from subprime lenders had black and Hispanic majorities, and the 10 areas with the lowest rates were mainly non-Hispanic white.

"...the rate of subprime lending is far higher for minorities than for whites even at higher income levels. For example, 24 percent of non-Hispanic white borrowers earning $125,000 to $150,000 took out a subprime mortgage in 2006, compared with 52 percent of Hispanics and 63 percent of non-Hispanic blacks in the same income range."

"July 13, 2007--The National Association for the Advancement of Colored People stepped into the fight against subprime lending Wednesday when it sued 12 national mortgage-lending companies for discriminatory practices."

"But Hispanics and African-Americans were far more likely to leverage the American dream with subprime loans — higher-cost products for buyers with impaired credit — that are now going bad at an alarming rate.

"About 46% of Hispanics and 55% of blacks who took out purchase mortgages in 2005 got higher-cost loans, compared with about 17% of whites and Asians, according to Federal Reserve data. The South Side of Chicago, with a large concentration of minority borrowers, has a high concentration of subprime loans and the state's highest foreclosure rate. In Boston, where defaults are rising — especially in minority areas — 73% of high-income black buyers (those making $92,000 to $152,000) and 70% of high-income Hispanics had subprime loans in 2005, compared with 17% of whites.

"...Recent immigrants lack credit histories, and 35% of Latino families don't have checking accounts. Hispanic families are more apt to have undocumented income, leading them to lenders who make loans without income verification, according to the National Council of La Raza.[...]

"Another reason for the subprime surge: Lenders have been supported by politicians and community leaders eager to promote minority homeownership, which remains about 25 percentage points below that of white non-Hispanics.

"'Access became such a buzzword that people forgot about basic lending practices,' says Keith Corbett, executive vice president of the Center for Responsible Lending. 'You are really in debt servitude, having a loan with a loan-to-value ratio of 100% or greater.'"

"High-cost subprime mortgages have often been framed as loans that catered to people with blemished credit records or little experience with debt.

"There has been less attention paid to the concentration of these loans in neighborhoods that are largely black, Hispanic, or both. This pattern, documented in federal loan records, holds true even when comparing white middle-income or upper-income neighborhoods with similar minority ones."

"The Joint Center for Political and Economic Studies reports that the rate of subprime mortgages for Latinos and African Americans is about double the rate for whites. In 2006, subprimes made up one in four mortgages (26 percent) made to whites, 47 percent of those to Latinos and 53 percent of mortgages that went to African Americans."

"Illegal immigrants were able to buy U.S. homes during the boom years, either by showing evidence that they pay taxes or by simply presenting false documents. Many of them took out high interest fixed-rate loans or subprime mortgages with a low entry rate that later rose sharply."

"It boggles the mind to think how many illegal aliens are homeowners in this country thanks to these programs, all fully insured by our government. Because of fear of lawsuits for discrimination I can also tell you that a lender may have a borrower who speaks little or no English who claims to be either a citizen or resident alien and it will not be questioned nor any proof required."

"Austan Goolsbee: Also, the historical evidence suggests that cracking down on new mortgages may hit exactly the wrong people. As Professor Rosen explains, 'The main thing that innovations in the mortgage market have done over the past 30 years is to let in the excluded: the young, the discriminated against, the people without a lot of money in the bank to use for a down payment.' It has allowed them access to mortgages whereas lenders would have once just turned them away.

"The Center for Responsible Lending estimated that in 2005, a majority of home loans to African-Americans and 40 percent of home loans to Hispanics were subprime loans. The existence and spread of subprime lending helps explain the drastic growth of homeownership for these same groups. Since 1995, for example, the number of African-American households has risen by about 20 percent, but the number of African-American homeowners has risen almost twice that rate, by about 35 percent. For Hispanics, the number of households is up about 45 percent and the number of homeowning households is up by almost 70 percent."

"Presidential nominee Barack Obama joins the list of several other high-profile Democratic Party members who received highly favorable home loans.

"Obama, D-Ill., reportedly purchased a $1.65 million mansion in Chicago through a 'super, super jumbo' loan he received from Northern Trust Bank in Illinois, the Washington Post reports.

"The portion of the money financed through the lender ($1.32 million) was offered to the Obamas at an unusually low discount interest rate locked in at 5.625 percent over the life of the 30-year fixed-rate loan, which was below the average of what a typical Chicagoan pursuing a similar low loan rate received at the time.

"For his part, Obama and his camp are defending the lower rate as lender competition for business. A spokesman for the camp says, 'The Obamas have since had as much as $3 million invested through Northern Trust.'

"Obama joins Sen. Chris Dodd, D-Conn., and Sen. Kent Conrad, D-N.D., on the list of high-profile public figures who received 'VIP' loans that some now are scrutinizing as alleged trade-offs for political favors.

"According to a report released last month by Condé Nast, Dodd received highly favorable loans under the designation, 'Friend of Angelo,' a reference to embattled Countrywide Financial Corp. head Angelo Mozilo.

"Dodd, who chairs the Senate Banking Committee, received loans from Countrywide that reportedly saved him tens of thousands of dollars.

"Conrad also has been named as a recipient of special-consideration loans from the beleaguered lender.

"Countrywide is the same bank involved in the loan scandal that caused Obama's vice presidential Vetting Team Chief James Johnson to resign amid criticism over his personal loan deals with the lender.

"Other high-ranking political officials involved in questionable 'VIP' home loans include former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke, Condé Nast reports."

This was the first time the Federal government had to place an explicit bet -- with our money -- on the proposition that setting racial goals or quotas for private economic decisions would yield the same overall performance that not setting such goals would. And we are losing the bet to a net tune of, say, $100 to $500 billion.

What are the costs of all the racial goal-setting, in education, hiring and promotion, where there has been no explicit bet and thus no such obvious measure of failure?

There are virtues in capital markets. They measure things some would like unmeasured.

"As you can see from the garbled syntax, this is Bush winging it, straight from his heart. He really believes all this stuff."

Bush is an elitist. And he is a christian. So by really believing it he can garner voters, feel good about his faith, and not have to worry about having to live in those hoods or pay the bill. What's so hard to understand?

The minority home ownership deal is definitely important, but I see another one of Steve's theories involved: the corrupt high IQ elite. This particular economic H-bomb was formulated by Harvard MBAs who were entranced abstract economic theory. Without actually producing anything, they thought that by simply moving money around and creating clever ways to do so they could produce riches. Cleverness without wisdom caused this.

What Bush is is a Hollywood wanna be. Actors get the fun (and sometimes even the credit) of being heroes, intellectuals, and even villains all without risking a bullet, reading a book, or going to jail. Bush wants that, too. He wants people to look at his dumb visage on the teevee and say "There, daddy, that man's a hero. And he's really compassionate, too."

Bush wants to look tough. He had that option. He could have gone to Vietnam. Instead he presents himself as a tough guy by saying "You're with us or your against us. And bring me that man dead or alive." While he sends other folks off to war.

And then he shows how compassionate he is. He could be compassionate and boost minority home ownership himself by lending Darnell and Shirica a few of his inherited millions, and taking the loss himself if they don't pay him back, but does he? No, instead he lends them taxpayer dollars, and taxpayers are on the hook for all the money they fail to pay back.

We just have way too many congressmen in Washington who want to look compassionate to the folks watching the teevee by spending other people's money instead of giving away their own. The recently, gloriously defeated Rep. Chris Cannon here in Utah used to speak of his days as a Mormon missionary in Guatamala, and how that's why he was so compassionate towards illegal immigrants. I always wanted to ask him, "Chris, you're a multimillionaire. How much of your own money has gone to help these people?"

I remembered this speech, if I'm correct it was broascast by CNN here in Europe. It took me a while to figure out which speech it exactly was and I finaaly ended up at this page.

Great blog Steve! What strike me most is that the blame has been put on almost everybody but Bush. And it was clearly his innitiative.The mainstream media should pay more attention to this speech because it all started here.

Hang in there my friends accross the pond, things will get better. And keep up the good work Steve!

I am a European citizen from the Netherlands so excuse me for my bad typing.

The American politics have always interested me, so i follow the most of it.I also connected the 2008 bank- crisis with this speech from Bush about home ownership for minorities from 2002.

I tried to get this message into the media in the end of 2008 in my country but nobody believed me or did not even answer my message. After about a year the same message was on almost all American media but in our country: not a word about it.

So i tried to get this speech under media attention again in 2009 and also recently in 2010 but it never reached any media.

Why is there never been more investigation about this main cause of the crisis.Even the exact names of the banks who first fell where mentioned in this speech for their support and big contribution in money(loans).

Here's the Google Wallet FAQ. From it: "You will need to have (or sign up for) Google Wallet to send or receive money. If you have ever purchased anything on Google Play, then you most likely already have a Google Wallet. If you do not yet have a Google Wallet, don’t worry, the process is simple: go to wallet.google.com and follow the steps." You probably already have a Google ID and password, which Google Wallet uses, so signing up Wallet is pretty painless.

You can put money into your Google Wallet Balance from your bank account and send it with no service fee.

Google Wallet works from both a website and a smartphone app (Android and iPhone -- the Google Wallet app is currently available only in the U.S., but the Google Wallet website can be used in 160 countries).

Or, once you sign up with Google Wallet, you can simply send money via credit card, bank transfer, or Wallet Balance as an attachment from Google's free Gmail email service. Here'show to do it.

(Non-tax deductible.)

Fourth: if you have a Wells Fargo bank account, you can transfer money to me (with no fees) via Wells Fargo SurePay. Just tell WF SurePay to send the money to my ancient AOL email address steveslrATaol.com -- replace the AT with the usual @). (Non-tax deductible.)

Fifth: if you have a Chase bank account (or, theoretically,other bank accounts), you can transfer money to me (with no fees) via Chase QuickPay (FAQ). Just tell Chase QuickPay to send the money to my ancient AOL email address (steveslrATaol.com -- replace the AT with the usual @). If Chase asks for the name on my account, it's Steven Sailer with an n at the end of Steven. (Non-tax deductible.)

My Book:

"Steve Sailer gives us the real Barack Obama, who turns out to be very, very different - and much more interesting - than the bland healer/uniter image stitched together out of whole cloth this past six years by Obama's packager, David Axelrod. Making heavy use of Obama's own writings, which he admires for their literary artistry, Sailer gives the deepest insights I have yet seen into Obama's lifelong obsession with 'race and inheritance,' and rounds off his brilliant character portrait with speculations on how Obama's personality might play out in the Presidency." - John Derbyshire Author, "Prime Obsession: Bernhard Riemann and the Greatest Unsolved Problem in Mathematics" Click on the image above to buy my book, a reader's guide to the new President's autobiography.